EPA has withdrawn the new ASTM E1527-13 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” as satisfying the requirements for conducting all appropriate inquiries under the Comprehensive Environmental Response, Compensation, and Liability Act.
A party often conducts a Phase I assessment to perform all appropriate inquiries, as bona fide prospective purchaser, contiguous property owner, or innocent landowner, when purchasing potentially contaminated real estate to establish a limitation on liability under CERCLA (i.e., the Superfund law).
An ASTM E1527-05 (i.e., using the existing 2005 standard) Phase I assessment is a prerequisite to LEED for Schools certification and that 2005 standard is tied to credits in other LEED rating systems.
In an earlier post on this blog, I wrote From Love Canal to a New Option for a Phase I Environmental Site Assessment describing the proposed rule and the changes in the Phase I assessment process. EPA had said if it received adverse comment on the proposed ASTM E1527-13 standard, the agency would withdraw the direct final rule.
The August 15, 2013 proposed rule came apart at the seams when EPA received huge numbers of adverse comments.
There was wide criticism of EPA’s misjudgment to allow parties to use either the current 2005 or updated 2013 version of the E1527 standard for a Phase I to meet all appropriate inquiries requirements. Given that a Phase I utilizing the 2013 standard will be more expensive, borrowers in commercial loans, who account for a large portion of Phase I assessments, were expected to continue to use the 2005 standard, thus orphaning the new 2013 standard. Many commentators also suggested that the use of two standards was a miscue that would create confusion in the market place and may increase the difficulty in justifying the conclusions of a Phase I in many transactions.
The fix that some have suggested is simply to phase out 2005 Phase I and have it replaced with the 2013 version. But while such sounds simple, there appears to be no scientific justification for that change.
The now withdrawn direct rule was to have been effective yesterday, November 13, 2013. It is expected EPA will now proceed with a traditional rule process. For those who want to look into the future, the ASTM E1527-13 standard is still available from ASTM International at www.astm.org.
And until there is further action the ASTM E1527-05 remains the standard practice for a Phase I Environmental Site Assessment Process (for most) to satisfy the requirements to qualify for liability protections.